Gas, steel drives Posco International Q2 profits up

This file photo, provided by Posco International on Feb. 23, 2023, shows its offshore gas field in Myanmar. [Yonhap]

Posco International said Monday its second-quarter profit rose 11.4 percent from a year earlier, buoyed by solid performances in the gas upstream and steel trading segments.

Operating profit reached 357.2 billion won ($278.1 million) in the April-June period, compared with 320.6 billion won the previous year, the energy and general trading unit under Korean steel giant Posco Holdings said in a regulatory filing.

Sales decreased 19.9 percent on-year to 8.86 trillion won. Net income came to 220.5 billion won, down 6.5 percent from a year earlier.

The earnings exceeded market expectations. The average estimate of net profit by analysts stood at 205.2 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

Its energy division, mainly engaged in the exploration and production of liquefied natural gas (LNG), generated 208.2 billion won in operating profit on sales of 981.1 billion won, the company said.

Despite the seasonal factor, the LNG plant segment posted over 45 billion won in operating income, contributing to the stable quarterly performance, it said.

The global trading sector, which includes the trading of steel products and other commodities, booked 149 billion won in operating income with sales of 7.88 trillion won.

Posco International said it expects business conditions to remain tough through the second half of this year amid China's slowing growth and the sluggish economy in Europe, among other factors.

The company said it plans to focus on LNG and renewable energy and diversify the markets in trading as part of efforts for continued growth.

Posco International has engaged in gas exploration since 2000, when it first began its gas mining project in Myanmar.

Its LNG segment has expanded since Posco International merged with Posco Energy, a Posco energy affiliate engaged in LNG bunkering and power generation.

Shares in Posco International spiked 29.92 percent to 66,000 won on the main Seoul bourse Monday, versus the broader Kospi's 0.72 percent gain. The earnings results were released after the market opened.

Yonhap